Georgia Regents hospital finances improves, but challenges await

The health system of Geor­gia Re­gents University bounced back to have a healthier financial quarter but faces many challenges ahead, including increasing numbers of patients who must be watched for little or no pay.

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The boards overseeing Geor­gia Re­gents Medical Cen­ter and the health system met Thursday to find better financial news. After essentially breaking even the first six months of its fiscal year, the health system could report a margin of $6.7 millionfor the most recent quarter. That is wellbelow the $23 million it had budgeted, mainly because a lack of volume in admissions and surgeries resulted in $20 million less in revenue.

Part of the problem is a 35 percent increase in “observation” patients, who cannot be safely discharged but do not meet the criteria for admission. There is little to no reimbursement for many of those patients, said David Hefner, the executive vice president for clinical affairs.

“We’re trying to do the right thing but getting zero or no credit for it,” he said.

The Centers for Medicare and Medicaid Services and its contractors have become more active about reviewing criteria for patient admissions, particularly for short stays, which has caused hospitals to be more cautious for fear of having to return payments, Hefner said.

It’s a problem across the country, said GRU President Ricardo Azziz, whois also CEO of the health system.

After initiating new programs to turn things around, the health system saw a 5 percent return in January, a 6 percent return in February and a 7 percent return in March.

“We are headed in the right direction,” said Greg Damron, the vice president of financial services.

However, the health system faces substantial cuts from sequestration and on the state level, Azziz said. State appropriations to the university have been cut by 50 percent over five years, Georgia is cutting $6 million in Medicaid supplemental payments and South Carolina is cutting $3 million in support for graduate medical education, he said. Both states are also refusing federal support to expand Medicaid, Azziz said.

“It’s very cloudy skies, actually very stormy,” he said. “Pretty much almost tornado weather coming down the pike.”

A better performance by the health system was offset somewhat by an $800,000 loss by Georgia Regents Medical Asso­ciates, which does billing for the faculty. Part of that has been problems with billing, which is being cleared up, Damron said.

After a short executive session, the board approved a new agreement between Med­ical Associates and the health system for “support of clinical deficits” in providing anesthesiology and cancer services at the hospital, internal medicine and specialty care at the Lake Oco­nee office and orthopedic services at Georgia Regents Ortho­pedic Associates. The resolution notes the aid is more than $500,000, but no specific amount is given.

Similar support was approved in February to cover clinical deficits for those who have to provide services related to round-the-clock trauma care in anesthesiology, cardio­thoracic surgery and radiology, with up to $1.9 million in support for anesthesiology and up to $4.8 million for radiology, according to documents obtained by The Augusta Chronicle.